phil_t98
#SonyToo
how many games have a review embargo and end up shite, a review embargo does not reflect quality of game
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Xbox Game Pass generated $2.9b revenue in 2021
- Thread starter Banjo64
- Start date
how many games have a review embargo and end up shite, a review embargo does not reflect quality of game
HeisenbergFX4
Member
You saying I am lying about buying games that are on Game Pass or in your opinion not enough people do it?
splattered
Member
Errr GamePass is still relatively new service, things like this have to be proven to some publishers before they jump in. It may take a bit of time and evidence of success (Which it IS showing so far) You can't just sit here and try and crap on it because everyone didn't jump in day one and toss their AAA games on it sight unseen.
normalguy09x
Member
2.9 billion in revenue sounds nice. But how much profit does the service makes?
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PropellerEar
Member
Nowhere does he say you're lying, learn to read.
Flutta
Banned
It’s so serious that you have to be in every thread that mentions GP with your pitchforks ready to defending it like its your daily job. Or maybe it is who knowsNo, most of us like to debate about big corporations profit margins. It's a very serious subject.
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Topher
Identifies as young
Personally I don't think it is Microsoft's strategy to get big third party AAA games on Game Pass day one. Phil Spencer said they are not going to burn through a lot of cash here and I think that is wise to keep the service sustainable. When Microsoft's first party including AB are cranking out the games then you'll have a ton of first party content. Anything spent on third party right now is just a stopgap measure. So in the meantime, we have older and smaller games. That's my guess anyway. Edit: actually not my guess, but makes sense to me and based primarily on the talk Piers Harding-Rolls gave at GDC on the future of game subscriptions.
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drganon
Member
Who knows. They could be raking in profits, losing money by the truckloads or barely breaking even. Without any info other than revenue it's impossible to tell.
It seems that I did not answer you, but I said that your example is not a trend, otherwise major publishers would be much more willing to launch their games on the first day of subscription
adamsapple
Or is it just one of Phil's balls in my throat?
It’s so serious that you have to be in every thread that mentions GP with your pitchforks ready to defending it like its your daily job. Or maybe it is who knows
Both of our tags betray us brother.
HeisenbergFX4
Member
I know you didn't answer me directly but the guy who was responding to me and just wanted clarification on if you just didn't believe people were buying Game Pass games or just not enough of a trend to move the needle, thank you
I read it several times and he answered me so thanks for your input which was pretty useless like a lot of your posts
Flutta
Banned
How do we get rid of those
In fact, more often than not, there is a direct correlation.
It only doesn't work with mostly Japanese developers and publishers.
And so, it’s quite easy to assume that it’s more profitable for a small developer to have reviews come out before the release, so that they talk about the game more, and, accordingly, the number of people who will either pay on release or launch the game by subscription will increase
adamsapple
Or is it just one of Phil's balls in my throat?
Whether you like it or not, for the most part, only big blockbusters can grow this service's subscriber base.
And if your partners are not eager to release their AAA-class product into your service from the first day, then you need to do something about it.
And Microsoft did by buying two publishers
adamsapple
Or is it just one of Phil's balls in my throat?
All their first party output is/will always come to the service day 1, along with some other notable games like Outriders, Sniper Elite 5, Plague Tale: Requiem which granted are not 100 million AAA games, but those are still the kinds of day 1 games that get people talking.
When you add CoD, Diablo etc to that from day 1, that should be a much bigger uptick in interest/subscription in GP.
PropellerEar
Member
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splattered
Member
Yeah i agree with you 100%, though as MS gets more first party titles up here and the service continues to grow we will probably start to see more and more AAA third party games hitting as publishers jump on the bandwagon. Subscriptions are the way of the future whether people like it or not. As long as it's always an option that's fine with me.
deriks
4-Time GIF/Meme God
Exactly
People need to understand that the physical media is the default way. Digital, subscription, Cloud, whatever the fuck comes next are all options and should never take the primary way
DeepEnigma
Gold Member
John Wick
Member
Yes but Jade Raymond's company didn't cost $79 billion either.
ToTTenTranz
Banned
Well if Microsoft is indeed hiding the $1 and Gold-converted subscriptions behind their expenses/investments structure, then these numbers are always very easy to calculate as revenue = number of subscriptions × annual default price of subscription.
I originally presented those calculations as a "best case scenario" for Gamepass, It was an exercise to show how their investments on new studios/publishers weren't going to be recouped anytime soon through GP alone, at least not with GP's current price.
OTOH, it also means these $2.9B don't really represent anything. It's not even the money they're getting from GP subscribers..
I would understand this method if everyone who got a $1 or Gold conversion then upgraded to full price within 3 months or less. But the reality is not everyone with a $1 subscription is then paying for the full thing afterwards, neither are the Gold-converters doing it for a short period of time (my Gold-converted Ultimate will last until December 2024, for example).
John Wick
Member
So in two years Xbox divisions profits will be $79 billion?
Christ.
The point is that you cannot compare Gamepass time-to-profitability with the likes of Netflix and Spotify since there’s other sources of revenue available to take much of the costs of content for GP. You were the one that made that comparison, not me.
Chukhopops
Member
GamePass revenue doesn’t represent the revenue obtained from GamePass subscriptions?
ReBurn
Gold Member
A game like Cooking Simulator is important for bringing in the kinds of subscribers that are going to make Gamepass successful. Microsoft isn't building it for the people here who constantly whine about digital and someone taking their discs way. They're building It for the people who like Cooking Simulator. So it makes sense that 0.06% of one year's revenue would go to pay for having that game there for those people to play. $600k sounded like a lot when nobody knew the $2.9b number and they thought nobody was paying for it. This context shows how it makes sense.
ToTTenTranz
Banned
GamePass revenue doesn’t represent the revenue obtained from GamePass subscriptions?
If they're counting every subscription as full price and the $1 + Gold-conversion discounts go under "expenses" then no. Microsoft isn't seeing that money.
Let's say I propose to wash your car every week. My rate is $1000/year, but I'm actually offering a 99% discount to everyone right now.
You'll only be paying me $10/year, but using this method I'll announce I'm getting an excellent revenue of $1000/year for every client.
Which is true and probably legal to say, and it will sound great. As long as no one notices I'm also spending $990 per year on each client due to the discount.
In reality, I'm just getting paid $10 to wash each client's car 50 times every year, which is a terrible waste of my time.
IFireflyl
Gold Member
I haven't compared Game Pass' time-to-profitability to Netflix and Spotify because it isn't possible to do so since we don't even know if Game Pass is profitable. Since we don't have actual data the only thing we can do is look at other companies who have gone through similar subscription models. I never said it was a 1:1 comparison. It's just the closest we've got. My response for this wasn't even to you. It was towards another user asking why I personally didn't think they were profitable yet. Your opening response of "Christ" tells me that you're getting bent out of shape, and there is no reason for that.
I never said it didn't make sense. Even if Game Pass is currently hemorrhaging money it makes sense in the same way that Netflix, and Spotify, and even MoviePass made sense. I wasn't arguing otherwise.
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Zathalus
Member
It's not legal to say, just doing a simple Google search proves that.
ReBurn
Gold Member
I never said you did. I was just pointing out that $600K for Cooking Simulator absolutely makes sense. There was a reason that you specifically called it out and your comment referenced "hemorrhaging money." In context this expense, and many other expenses relating to content we have discussed, make sense.
I would be surprised if the situation was ever as dramatic as hemorrhaging. Netflix and Spotify weren't backed by an existing multi-billion dollar revenue stream when they started up. They have both grown that revenue stream and have sacrificed short term profitability for the sake of long term value from investment. Netflix has learned that the only way they can survive is good content that they had to create themselves along with serving other content. Microsoft started Gamepass with those lessons at the foundation. So it's not quite the same thing.
adamsapple
Or is it just one of Phil's balls in my throat?
GamePass revenue doesn’t represent the revenue obtained from GamePass subscriptions?
This is almost as bad of a take as "Game pass revenue is not Xbox revenue, its Microsoft revenue".
Yes that was an actual take by a Gaffer.
Chukhopops
Member
Do you honestly believe that?
What would be the point of over-reporting revenue to a regulation authority when MS’ entire argument is that they are smaller than their competitors and don’t represent a monopoly risk?
Kokoloko85
Member
Most people won’t buy and have gamepass, thats the whole point of the service I guess. I mean I bought Stray and had it on PSplus, you also buy when you also have Gamepass because the devs make more money, but most people wont buy when they have the service.
I guess it all depends on A.) How much the game cost to make? And B.) How much are platforms like MS and Sony paying them to have them Day 1 and also later to be on their subscription service?
So in a year, Diablo, COD, Starfield, Redfall, Scorn? Im guessing some of these are costing more than 200m and some less than 100m, Some more or less etc.
Maybe someone should do the maths. How much do MS, Playstation pay for PS+ and Xbox Gold monthly games? How much do the 1st party games cost?
How much for 3rd party Day1 titles on subscription service and how much for titles not day 1?
And I guess, how much do these services cost to maintain, servers, staff etc, I have no idea if these things need much money after they are made
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ToTTenTranz
Banned
I believe in Investopedia's definition of Promotion Expenses as included in operational costs.
Promotion Expenses are tax-deductible.
Whilst your post is fine and makes logical sense, you do have to keep in mind we literally have people in this thread claiming that Activision Blizzard will 'pay for itself' in a couple of years, so they too ignore the asset value and think that somehow $69 billion profit will be made in the space of a couple of years and so people saying 'err no, it would take decades' are at least accurate to those types of claims.
IWasInSeinfeld
Member
Is that good? Or is it too low for a company like Microsoft?
Chukhopops
Member
You’re confusing everything. You cannot report as revenue X something that you did not sell for X and then deduct the difference from the base price as an expense.
What you could do is sell for X and then do some cashback type offer which costs you a certain amount, this would be an expense in your P&L which would reduce your EBITDA.
And again, how would that make sense to over-report their revenue when MS wants to appear as small and harmless as possible in their argument to the regulator? That makes no sense any way you look at it.
PropellerEar
Member
Customers didn't pay $2.9B during 2021 for GP, no where close to that number.
Topher
Identifies as young
It is gross sales. Net sales are gross sales minus returns and discounts. I think too much is being made of this though. Might as well point to every company's revenue and say that's not net sales.
DeepEnigma
Gold Member
Finally, someone read between the lines.
PropellerEar
Member
Yeah, hard to understand people can't figure this out.
ToTTenTranz
Banned
It's not a piece of information from which we can deduct success or failure. It's simply the product of number of subscribers (which we already knew) times the average cost of the service (which we also knew).
The only thing you can take from this thread is that some GAF users seemingly get very emotional with this subject and tend to jump to conclusions on both sides (which we already knew).
SlimySnake
Flashless at the Golden Globes
It's amazing. First party games would have to sell 50 million copies at $60 to get to $2.9 billion a year. They had zero first party games release this year and even if the subs failed to increase, they wouldve made almost $3 billion without their first party even lifting a finger.
For example, Sony sold 47 million first party games last fiscal year. This includes Ratchet, Returnal, MLB The Show, HFW and GT7. And not all of them at full price.
MS is doing better than Sony without actually releasing a single game.
phil_t98
#SonyToo
so tell us how you came to this conclusion
Topher
Identifies as young
But Sony isn't sharing that first party revenue with a bunch of third party publishers and devs either. No idea how anyone could to any conclusion based on so little data. This is why net income* is important.
* I didn't use the P word
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Haggard
Banned
Sorry, but without knowing the "cost" part of GP that statement is just gibberish.
adamsapple
Or is it just one of Phil's balls in my throat?
Game Pass has been the MvP holding their shit together in 2022 after all the delays of the big games lol.
Hopefully 2023 is as far different as possible.
